5 Must Know CFD Trading Rules

CFD is basically the kind of trade where you speculate the price movement of a number of financial markets like shares, indices, commodities, and currencies. If you are right, you profit from the trade and if you are wrong, you lose. It is a very popular kind of trade for many investors today due to its flexibility. This is because a trader can trade in the rising as well as on the falling markets. Just like in any other kind of trade, CFD has rules that traders must adhere to. Failure to follow through with the rules is the reason why many people make mistakes in CFD, which in turn makes it hard for them to enjoy success in their trading career. Here are 5 must know online CFD trading rules for every aspiring trader:

  1. Always use logic, not emotions

Emotions constantly get in the way of decision making for many traders. This is so especially if you focus so much on what you might gain through a certain trade. That is why you need a plan, and the discipline to follow your plan no matter how many times you lose. Trading emotionally may give you big winnings occasionally but the winnings are not consistent and you might be losing more on the other end.

  1. Do not dwell on a single trade

Betting all your money or most of your money in a single trade is a big risk, as you might end up losing it all at once. Traders need to know how to spread the risk, without betting on all the money they have in their account. This way, there is no single time they will be without money in their trading accounts.

  1. Timing is important in CFD

You should never enter a trade when it is too early even when you are sure about the long-term direction of the market. This is most cases leads to significant losses. You need to wait for a trigger; just a single confirmation to be sure about the direction you will trade in. Taking time to think things through may be all you need to enjoy a big win thereafter.

  1. Always diversify

A well-diversified portfolio will never fail you. In as much as you need not trade with all the money in your account, you need to try your chances in different companies and industries if possible. This way, if something were to go wrong in one direction, you will still have others to rely on. With the uncertainty of the market, you can be sure that some prices will be going up when others are declining.

  1. Use stop losses, but wisely

Stop losses will be very good in this kind of trading considering how risky CFD is. They will help you minimize your losses. However, you have to be careful with them because if they are too tight, you might end up losing even more. You need to use them wisely, allowing the market to go about its price increases and declines before settling for one direction. Take time to think of how much loss you can take so as to set stop losses at a considerable level.

It is very easy to make profits in CFD because every move the market makes in your favor gains you some profits. However, you need to abide by the rules because these are what will make you a smart trader. Always remember that there are losses too, and the market can be very unfair especially if you trading recklessly.

How Do Cryptocurrencies Work?


Before you can understand how cryptocurrencies work. It would be good to understand how normal currencies, such as the USD work. When you want to carry out a transaction, you will typically start with a normal currency. For the transaction to occur, you will either use this currency in cash form, or choose to complete a transaction electronically. In both cases, your access to the currency comes through a bank where you have entrusted your money for safe keeping. Furthermore, with a bank, it is easier for you to keep track of the money and your spending.

Cryptocurrencies are unique as they are not depending on any banking system at all. This means that you have a different system that will be responsible for managing your transactions. What this does, is that it puts you in more control of your currency. Typically, the way that one keeps track of a cryptocurrency is through a ledger where it will reveal all payments from everyone who is using the cryptocurrency. It is possible to easily determine who owes who money, as well as who has made their payments and in what amounts. It is worth noting that the ledger is not owned by any body, instead, each person has their own ledger and is tasked with updating it. Furthermore, all ledgers are made public. This is for the purposes of trust, as every person using this currency needs to be fair and open.

To get a hold of a cryptocurrency, you can purchase it from a broker. Once you have done so you will need to keep it within a cryptographic wallet.



In a system where everyone can access the information of everyone else, one of the key concerns that users may have is security. It is worth noting that the way information is transmitted, as well as the way that it has been stored is highly specific. To begin with, you would need to send a message and address it to someone so that they are able to read it. It is within this message that you can share information on the currency. This is a form of encryption. It is used for the verification of the transactions, as well as to maintain a level of control on the entire system as data is being mined.


Cryptocurrency Values

These are continuously becoming more popular as they have high values, normally much higher than your typical currency. Take for example the first cryptocurrency which was Bitcoin. Although it started off with a low value, it has increased considerably and now one is worth more than USD 1000. This is a currency that is released slowly over time, and only a limited amount has been created. This means that there is some scarcity that this cryptocurrency embodies. As it increases in popularity, it is this scarcity that helps to drive up the value.


Bitcoin started almost ten years ago in 2009, and it is the most popular cryptocurrency that is used to date. Since its inception, there are now more than 900 cryptocurrencies that are available on the internet for people to choose from. More people are looking to use cryptocurrencies because they offer an elevated level of security, and also allow for some anonymity. It is impossible to reverse a transaction, or to fake one. The fees of using these currencies are low and everyone can open an account, unlike banks which may restrict some people from being able to open up an account. The only thing that one should note is that cryptocurrencies are highly volatile.